If you have ever felt stress after passing a highway sign warning, “No gas next 90 miles,” you understand the importance of my hospital. I am the chief executive of Lincoln Health, a 25-bed county-owned hospital in Hugo, Colo., a town of about 800. We are the only hospital on the I-70 corridor between Denver, 85 miles to our west, and Burlington, near the Kansas state line, some 80 miles to the east.
In 2021, a pileup involving dozens of cars on that highway brought more than 30 patients to our two-bed emergency room, where our small staff sprang into action to stabilize the most seriously injured patients. Our hospice team met with the family of a child who died at the scene of the accident. One fatality is too many, but without our hospital, there surely would have been more.
Nearly 200 rural hospitals have closed in the past two decades — the result of financial strain and staff shortages — but my hospital has been able to keep its doors open through sheer perseverance. Now, however, Congress is considering cuts to Medicaid that could wreak havoc on rural America’s fragile health care system. I worry about our future.
One proposal would reduce the portion of Medicaid dollars the federal government gives to states, such as Colorado, that have expanded Medicaid eligibility. Another would strictly cap federal payments to states, regardless of geographic differences in the cost of care.
Cuts to Medicaid could hurt the finances of hospitals across the country, but rural hospitals will be particularly affected. This is because rural patients are more likely to have health coverage from the government than from commercial insurers. (Nearly three-quarters of our revenue, for example, is from Medicaid and Medicare.) These programs are essential, but, unlike commercial insurance, they don’t always cover the total cost of care, which has been rising as drugs and supplies become more expensive. We also serve fewer patients than big city hospitals but still have fixed costs to stay operational. The result is that we run on minimal or negative operating margins.
According to the Colorado Rural Health Center, the state’s nonprofit office of rural health, roughly half of my state’s rural hospitals are operating in the red. Yet we’re relatively lucky: Colorado’s decision to expand Medicaid in 2014 has been a lifeline for us because it reduces the number of patients we see who can’t pay.
